Solar panel FIT payment cuts 'unlawful'Friends of the Earth wins solar panel challenge
23 December 2011
Plans to cut the amount of money people can earn from solar panels have been criticised as ‘legally flawed’ by the High Court.
Friends of the Earth and two solar companies - Solarcentury and HomeSun – took the government to court claiming plans to slash the amount of money paid to householders that produce electricity at home weren't given a fair consultation.
The payment scheme is called the feed-in tariff (FIT) and it is paid for by consumers through subsidies on energy bills. It offers guaranteed cash payments to those who produce their own electricity at home using renewable technologies such as solar panels. Our guide to the feed-in-tariff (FIT) explains how it works.
Planned changes to FIT
In October, the government proposed a reduction in FIT payments from next April - from 43.3p per kilowatt-hour to 21p - for new installations registered after 12 December. These changes mean solar might not be such a good financial investment. Previously, this change was due to affect solar installations registered on or after 1 April 1 2012.
Friends of the Earth claims the move will affect 29,000 jobs. Several large-scale solar installations have already been cancelled because of the plans.
Government breached rules
Yesterday the High Court ruled that the government had breached consultation rules, as the proposed eligibility date for the higher rate FIT payments was before the consultation into the changes was completed.
A report published today by two House of Commons select committees concluded that the changes are being rushed through without adequate notice to consumers and installers. It agreed with Which? that consumers who had already signed contracts before the proposals were announced should receive the higher rate.
Solar payment confusion
At the moment it is unclear what the outcome of the ruling could be for consumers and whether the proposed dates will be changed. The government has announced it will be seeking to appeal. If any appeal is unsuccessful the government could be forced to change its plans.